Playboy Enterprises, Inc. v. Terri Welles, Inc., 98-CV-0413-K(JFS).

Decision Date01 December 1999
Docket NumberNo. 98-CV-0413-K(JFS).,98-CV-0413-K(JFS).
Citation78 F.Supp.2d 1066
PartiesPLAYBOY ENTERPRISES, INC., a Delaware corporation, Plaintiff, v. TERRI WELLES, INC., a California corporation, Steven Huntington, an individual, Terri Welles, an individual; Michael Mihalko, an individual; and PIPPI, Inc., a California Corporation, Defendant.
CourtU.S. District Court — Southern District of California

R. Brooks, McKenna and Cuneo, San Diego, CA, Clarke A. Wixon, Darby and Darby, Los Angeles, CA, David R. Francescani, Francescani and Hayes, Great Neck, NY, Anthony Michael Glassman, Glassman Browning and Saltsman, Beverly Hills, CA, for Plaintiff.

David J. Noonan, Post Kirby Noonan and Sweat, San Diego, CA, Michael J. Plonsker, Law Offices of Lavely and Singer, Los Angeles, CA, Jay S. Kopelowitz, Kopelowitz and Associates, San Diego, CA, for Defendant Terri Welles.

Darren James Quinn, Law Offices of Darren J. Quinn, San Diego, CA, for Defendant Michael Mihalko.

Dorothy Ann Johnson, Post Kirby Noonan and Sweat, San Diego, CA, for Defendant Pippi Inc.

Andrea J. Anz, Bottum and Feliton, Los Angeles, CA, Craig E. Courter, Seltzer Caplan Wilkins and McMahon, San Diego, CA, Juanita R. Brooks, McKenna and Cuneo, San Diego, CA, Anthony Michael Glassman Glassman Browning and Saltsman, Beverly Hills, CA, Dominic J. Fote, Chapman Glucksman and Dean, Los Angeles, CA, for Playboy Enterprises, Inc.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, FOR SUMMARY ADJUDICATION

KEEP, District Judge.

On February 27, 1998, Plaintiff Playboy Enterprises, Inc. (PEI) filed a Complaint against Defendant Terri Welles.1 The Complaint consists of five causes of action: 1) Count I, trademark infringement pursuant to 15 U.S.C. § 1114(1); 2) Count II, false designation of origin and unfair competition under 15 U.S.C. § 1125(a); 3) Count III, dilution of trademarks pursuant to 15 U.S.C. § 1125(c); 4) Count IV, trademark infringement and unfair competition under California common law; and 5) Count V, unfair competition in violation of Cal. Bus. & Prof.Code § 17200, et seq. On December 21, 1998, Plaintiff filed a first amended complaint adding Defendants Terri Welles, Inc., the current business corporation owned and operated by Ms. Welles, whose internet on-line service comprises Ms. Welles' business, and Stephen Huntington, the former webmaster of Ms. Welles' website who was responsible for developing and maintaining Ms. Welles' website prior to Defendant Mihalko's succession to the job as webmaster. On April 1, 1999, Plaintiff filed a Second Amended Complaint, supplementing the Complaint with three additional causes of action: 1) Count VI, a claim of trademark counterfeiting pursuant to 15 U.S.C. § 1114(1); 2) Count VII, a claim of dilution of trademark in violation of Cal. Bus. & Prof.Code § 14335; 3) Count VIII, a claim of breach of contract based on a document involving business relations between PEI, Pippi, Inc., and Terri Welles. In its Second Amended Complaint, Plaintiff also added two defendants: 1) Pippi, Inc., a defunct California corporation which allegedly contracted with PEI and Terri Welles; and 2) Michael Mihalko, the current webmaster of Ms. Welles' website.

On October 18, 1999, Defendant Terri Welles, Terri Welles, Inc., and Pippi, Inc. (hereafter, "Defendant Welles" or "Welles") filed a motion for summary judgment or, in the alternative, for summary adjudication, of all eight of Plaintiff's claims against Defendants. Also on October 18, 1999, Defendant Michael Mihalko filed a motion for partial summary judgment, arguing that the "innocent infringer" defense under 15 U.S.C. § 1114(2) barred all Plaintiff's claims against him. Defendant Mihalko also filed a joinder in Defendant Welles' summary judgment motion. On October 18, 1999, Defendant Stephen Huntington filed a joinder in both Defendant Welles' and Defendant Mihalko's motions. On November 1, 1999, Plaintiff filed an opposition to Welles' motion for summary judgment or, in the alternative, for summary adjudication. In addition, Plaintiff filed an opposition to Defendant Mihalko's motion for partial summary judgment, objections to Defendant Mihalko's and Defendant Huntington's joinders, and evidentiary objections. On November 8, 1999, Defendant Welles filed a reply, and Defendant Mihalko filed a separate reply. Defendant Huntington did not file a reply.

I. BACKGROUND

The following background facts are taken in large part from the court's April 22, 1998 order denying Plaintiff's motion for preliminary injunction:

Plaintiff Playboy Enterprises, Inc. (PEI) is an international publishing and entertainment company. Since 1953, PEI has published Playboy magazine, a widely popular magazine with approximately ten (10) million readers each month. PEI also publishes numerous specialty magazines such as Playboy's Playmate Review, Playboy's Playmates of the Year, and Playboy's Calendar Playmates among other publications. In addition to its publishing ventures, PEI produces television programming for cable and direct-to-home satellite transmission and sells and licenses various goods and services including videos.

PEI has established two websites. According to Plaintiff, its free website, http://www.playboy.com, has become one of the most popular sites on the Web and is used to promote its magazine, goods, and services. Its other website, called the "Playboy Cyber Club," http://www.cyber.playboy.com, is devoted to promoting current and former PEI models.

PEI owns federally registered trademarks for the terms Playboy, Playmate, Playmate of the Month, and Playmate of the Year. The term Playmate of the Year is sometimes abbreviated "PMOY." PEI does not have a federally registered trademark in the abbreviation "PMOY," although PEI argues that "PMOY" is worthy of trademark protection because it is a well-known abbreviation for the trademark Playmate of the Year.

Defendant Terri Welles is a self-employed model and spokesperson, who began her modeling career with Playboy magazine in 1980. In May of 1980, Ms. Welles appeared on the cover of Playboy magazine and was subsequently featured as the "Playmate of the Month" in the December 1980 issue. Ms. Welles received the "Playmate of the Year" award in June of 1981. Since 1980, Ms. Welles has appeared in no less than thirteen (13) issues of Playboy magazine and eighteen (18) newsstand specials published by PEI. Ms. Welles claims that since 1980 she has always referred to herself as a "Playmate" or "Playmate of the Year" with the knowledge of PEI.

On June 29, 1997, Ms. Welles opened a website, http://www.terriwelles.com, which includes photographs of herself and others (both nude and clothed), a fan club posting board, an autobiography section, and a listing of current events and personal appearances. The domain name for Defendant Welles' site is "terriwelles," the heading for the website is "Terri Welles — Playmate of the Year 1981," and the title of the link page is "Terri Welles — Playboy Playmate of the Year 1981." Each of the pages uses "PMOY '81" as a repeating watermark in the background. According to Defendant, eleven (11) of the fifteen (15) free web pages include a disclaimer at the bottom of the pages, in varying font sizes depending on the page, which indicates that the website is not endorsed by PEI; the disclaimer reads as follows: "This site is neither endorsed, nor sponsored by, nor affiliated with Playboy Enterprises, Inc. PLAYBOY, PLAYMATE OF THE YEAR and PLAYMATE OF THE MONTH are registered trademarks of Playboy Enterprises, Inc." Defendant Welles uses the terms Playboy and Playmate along with other terms within the keywords section of the meta tags, which constitutes the internal index of the website used by some search engines. The site contains link pages to other erotic, adult-oriented websites. It also contains advertising "banners" for some of those websites.

Since May of 1997, Ms. Welles has been in contact with Plaintiff about the design and creation of her website. Defendant claims that Plaintiff, through Marcia Terrones, the director of the "Rights and Permission" department at PEI, informed her that she could identify herself as the "Playmate of the Year 1981" but that she could not reproduce the rabbit head logo on her proposed website. Various communications between Defendant and Plaintiff ensued. According to Defendant, PEI, through Hugh Hefner, initially complimented her website and encouraged her use of the title "Playmate of the Year 1981." However, Mr. Hefner later informed Defendant that use of PEI's trademarks were restricted; instead, he invited Defendant to join PEI's new Cyber Club. Defendant refused this invitation, and PEI continued to demand that Defendant remove the "Playmate of the Year" title from the home page as well as remove the PMOY watermark from the background.

II. STANDARD OF LAW

Federal Rule of Civil Procedure 56(c) provides that summary judgment is appropriate if there is no genuine issue as to any material fact, and the moving party is entitled to a judgment as a matter of law. Where the plaintiff bears the burden of proof at trial, summary judgment for defendant is appropriate if the defendant shows that there is an absence of evidence to support the plaintiff's claims. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Garneau v. City of Seattle, 147 F.3d 802, 807 (9th Cir.1998). The movant has the initial burden of demonstrating that summary judgment is proper. Adickes v. S.H. Kress and Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). The burden then shifts to the nonmovant to show that summary judgment is not appropriate. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To make such a showing, the nonmovant must go beyond the pleadings to designate ...

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